Thai Ho Group Inc (太和生技集團) yesterday said that it has received a ￥200 million (US$1.78 million) grant from the Japanese government to build a cosmetics plant in a special economic zone on Japan’s Okinawa island.
The grant covers about 60 percent of the estimated cost of installing manufacturing equipment at the plant, the company said, adding that the figure would be booked as a deduction on the cost of investment.
The new plant would be operated by a joint venture with Okinawa-based Point Pyuru, a Japanese manufacturer specializing in skincare products with deep sea water extracts.
“We own a 55 percent majority stake in the ￥800 million joint venture and were pleasantly surprised by the Japanese government’s openness towards foreign investors,” Thai Ho chief operating officer Michael Kuo (郭靖凱) said at a news conference in Taipei.
Kuo said that the Japanese government support reflected the company’s supply chain relationship with international brands, such as Revlon Inc and L’Oreal SA, as well as its intention of working with a Japanese partner to tap into the European and US upscale cosmetics markets.
In addition, the new plant, which would be equipped with the latest automation technologies, could take on contract orders from Japanese cosmetic brands, Kuo added.
By contrast, the company has been strained by rising labor costs in China at its Shanghai plant, Kuo said.
The joint venture is to enjoy corporate tax exemptions of up to 40 percent, and Japan’s free-trade agreements and Economic Partnership Agreement would bring tariff savings of 5 percent to 20 percent on sales to Europe, the US and ASEAN member states, Kuo said.
He said that the “Made in Japan” distinction is highly valued by consumers across the globe.
Meanwhile, the new plant would help the company diversify its contract manufacturing revenue streams to include Japan as well as China, he said.
The company last reported a net income of NT$18 million (US$590,997) for last year, down from NT$41 million a year earlier. Earnings per share for last year were NT$0.74.
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